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Over the past year, conservative politicians in both Australia and the United States have been making noise. And the noise, increasingly, is this: sustainability has gone too far! Regulations are burdensome. Scope 3 emissions accounting is a bureaucratic noose. Climate-related disclosures are “woke finance.” Net zero? All but impossible.
The message, thinly veiled as economic pragmatism, is meant to signal something more visceral to the conservative base: a return to simpler times, to the old ways of doing business, when “green tape” didn’t get in the way of “jobs and growth.” It’s nostalgia posing as policy. And sustainability, once considered the realm of science, strategy, and risk, is now collateral in the culture war.
But while politicians grandstand, the private sector isn’t waiting. They’ve done the risk modelling, read the insurance reports, and seen the balance sheets. Climate change isn’t a partisan issue when it’s quantified in monetary losses. And increasingly, business is straying from the political script to push on with the important work of decarbonisation regardless of mandates or bipartisan support for sustainability.
The new anti-sustainability playbook
In the US, conservative attacks on climate policy have picked up pace. The Securities and Exchange Commission’s (SEC) efforts to enhance climate risk disclosures, particularly around scope 3 emissions, have faced aggressive pushback from Republican lawmakers, with key measures now coming under fire in the early days of the new administration.
Meanwhile, the EPA under Republican leadership has been floating revisions that could undercut its authority to regulate greenhouse gases. Even foreign aid targeted at climate resilience in developing nations has been subject to vicious cuts.
In Australia, the rhetoric is no less sharp. The federal coalition has pledged to repeal crucial parts of Labor’s mandatory climate-risk reporting regime, which started phasing in from January this year, as well as casting doubts about the long-term viability of the Safeguard Mechanism, which seeks to cap industrial emissions. The Liberal Party argues the reforms are overreach, that they’ll saddle small businesses and farmers with red tape. It’s a claim that’s been echoed by mining lobbyists and anti-ESG campaigners, despite the fact that the rules initially apply only to Australia’s largest companies and are modelled closely on international frameworks like the ISSB.
The Liberal Party is also pushing back against broader energy transition policies, softening support for renewables and invoking fears about grid reliability and household costs, even going so far as to claim that notoriously expensive nuclear energy would somehow bring down costs. The misguided subtext is clear: confuse and deregulate, and the economy wins.
But while politicians may see a vote-winning wedge, the business community increasingly sees risk. And in risk-based decisions, it’s hard to ignore the data.
Insurers say climate risk is financial risk
No industry is more acutely aware of risk than insurance. And what they’re seeing doesn’t support the rollback rhetoric.
According to the Insurance Council of Australia’s (ICA) 2023–24 Catastrophe Resilience Report, natural disasters in the reporting period triggered almost 157,000 claims and $2.19 billion in insured losses, despite it being a relatively mild season.
Over the past five years, the average annual insured loss from extreme weather has more than doubled to $4.5 billion, with flooding now Australia’s most expensive natural peril as many in South East Queensland and northern New South Wales can attest, having narrowly avoided utter calamity at the hands of Tropical Cyclone Alfred in a region unaccustomed to category two gales.
But that’s just the tip. Deloitte’s modelling for the Australian Business Roundtable estimates that even under a low-emissions scenario (one we are likely to exceed), the annual economic cost of natural disasters will reach $73 billion by 2060. Under high emissions trajectories, it’s closer to $94 billion a year.
The ICA has been unambiguous: resilience and risk reduction, not deregulation, are the only paths to affordability. Insurers are calling for tighter land use planning, stronger building codes, and government co-investment in mitigation infrastructure. They’re pushing for policies that address systemic climate risk, not short-term optics.
Meanwhile, the industry is suffering a profitability crunch. Despite premium hikes, net profits have fallen to an average of $1.50 per $100 of premiums since 2020, down from $5 a decade ago. The market is tightening, capital is more cautious, and risks are increasingly uninsurable in high-exposure regions.
In other words, insurers are pricing in climate risk regardless of who’s in office. And the rest of the economy is taking notice.
Business keeps decarbonising, with or without mandates
It’s easy to cast sustainability efforts as top-down compliance exercises, but for many businesses, the economic rationale is clear. Climate change threatens supply chains, infrastructure, asset values, and long-term viability.
Consider energy-intensive sectors. Mining giants like BHP have committed to scope 3 engagement strategies and are investing in decarbonisation not because it’s legally required (yet), but because investor expectations demand it. Woolworths continues to scale its renewable energy purchasing and electrification efforts, even as federal political winds shift.
Finance is equally pragmatic. Australia’s major banks, super funds, and insurers are already integrating climate risk into lending and investment decisions, using frameworks like the Task Force on Climate-related Financial Disclosures (TCFD). Some have committed to net-zero financed emissions by 2050, backed by interim targets.
And despite the political fire aimed at ESG, most of the backlash focuses on the social and governance arms of the acronym, not environmental risk management. Environmental performance remains a core part of risk assessments, especially in regulated sectors and capital markets.
Even the Australian Prudential Regulation Authority (APRA) has required large financial institutions to stress test for climate scenarios. When the regulators are building climate risk into the financial system itself, it’s hard to argue that business is simply going along with a “woke” fad.
Beyond politics: the case for staying the course
The challenge of climate change doesn’t fit neatly within three or four year political cycles. The causes are cumulative. The impacts are compounding. The solutions take decades to bear fruit.
Yet the temptation to politicise sustainability is growing. In a cost-of-living crisis, anything that sounds like a burden is an easy target. Reporting requirements. Green tape. Climate aid. They’re all increasingly bundled into a narrative of overreach and unnecessary intervention.
But while parliaments posture, the private sector is adjusting course. Because the real risks are material, not rhetorical. The market understands that the cost of action, while significant, pales in comparison to the cost of inaction.
Sustainability isn’t just about doing the right thing. It’s about doing the smart thing. And the businesses that will thrive in the decades ahead are the ones who know the difference.
Zach Greening is a writer, marketing specialist, and consultant at NettZero. The views expressed in this article are his own and do not represent the views of NettZero.